Wednesday, September 15, 2010

I've always thought of Tommy Koh as a staunch supporter of the PAP govt.

'The growing disparity and the hardship faced by the lowest 20 per cent of our workers is a threat to our social cohesion and inconsistent with our policy of inclusive growth,' - Tommy Koh.

GDP growth does not benefit ordinary Singaporeans unless the wealth created is shared more equally. We know the standard argument against minimum wage that it is not good for economic growth and job creation. This standard argument does not make sense if your goal is something else, say, enhances social equity, prevent the spread of poverty or raise the quality of life for the people at the bottom. You can create tons of jobs and attract billions in FDI if you keep your worker's wages low. Why do you think money FDI goes to China & Vietnam? Armies of peasant workers in these communist states willing to fill the factories work long hours for low wages. However, trying to compete against them using the "cheaper, better, faster" low wage strategy is a race to the bottom. You win only by impoverishing your own people. The PAP govt has brought in cheap labor from 3rd world countries to keep our GDP growth high. This depressed the wages of the bottom 20% and caused Singapore to have the highest income gap among developed countries. It is often said that Singapore is a developed country with a 3rd world wage structure.

Minimum wage, progressive taxation, social safety nets, universal healthcare and public housing are the ways to narrow or mitigate the effects of the income gap. The PAP govt has fouled up every single one of these - they implemented GST to cut corporate taxes & taxes of the highest income earners. Singapore has the most expensive public housing in the world - short in supply, high in prices and causes ordinary Singaporeans to be deep in debt for decades. They aspire to make Singapore a medical hub for the rich causing capacity to shift private hospitals and medical costs to escalate much faster than wages - they continuously shift the burden of these higher costs to ordinary Singaporeans to keep govt expenditure low. The hospital capacity has not expanded as 1 million people were added to the population causing the hospitals to be overcrowded. The minister in charge then pushed for medisave to be used for hospitals in Malaysia causing many of the sick to seek cheaper treatment in Malaysia (Malaysian hospitals now take care our sick !) Means testing which removes much of the subsidy for middle income families moving the heavy burden to those who get sick and their family was implemented this year. Adding to all these is the huge foreign influx which caused housing prices to escalate, public transport to be overcrowded and the income of Singaporeans to be depressed.

This govt now claims that "Singaporeans come 1st". Do you believe them when they say that? The PAP govt with the large network of companies to which it is linked has diversified its interests beyond that of ordinary Singaporeans. Its policies are lopsided and ordinary Singaporeans pay the price.

SENIOR diplomat Tommy Koh on Tuesday waded into a debate on minimum wage and argued in favour of such a wage as it will improve the lot of Singaporeans in low-paying jobs.

'The growing disparity and the hardship faced by the lowest 20 per cent of our workers is a threat to our social cohesion and inconsistent with our policy of inclusive growth,'he said at a book launch.

'As a Straits Times correspondent has recently commented, Singapore is a First World country with a Third World wage structure.'

Prof Koh, special adviser to the Institute of Policy Studies, was referring to an Insight feature in May on how wages of low-income workers in Singapore had not advanced.

He made his case in a speech at the launch of a book of essays on Singapore's success story and its challenges, Management of Success: Singapore Revisited.

His remarks come in the wake of a debate between two National University of Singapore economists.

52 comments:

In a recent survey of international competitiveness, Singapore comes out tops in labour wage competitiveness. I wonder if this is a double-edged compliment.

In the same survey, Singapore is ranked 30 or 40-something in business innovation/entrepreneurship. If you combine these two together, it just means the source of Singapore's competitiveness is not first-world brainpower, but third-world low wages and the willingness of its people to take such shit.

I don't know but I seriously think we have a BIG problem going forward if we are to continue with this kind of competitiveness strategy.

Right on target. Just to add, the longer PAP continue to do what it has been doing, the harder and riskier it is to get out of the hole....and the more unhappy people become. The PAP has dugged itself into a hole. Their own MP Inderjit Singh warned them in early 2009. But I think they are going to see some election pain. They simply kept going in the same direction despite the warning signs....it is as if they were mesmerised by myth of their own supercompetence and the belief that they are more or less solely responsible for Singapore's success and people will always be grateful to them.

They simply kept going in the same direction despite the warning signs....it is as if they were mesmerised by myth of their own supercompetence and the belief that they are more or less solely responsible for Singapore's success and people will always be grateful to them.

Lucky, u have to understand the way PAP works and its organisational structure. The PAP is basically a highly rigid top-down org, it is a mirror image of the SAF. so when leaders at the top are of poor quality, the whole org will fumble, become indecisive and ridiculously slow to react... The 2006 GE bears this out where one can see the so-called 'commander-in-chief' (running as head for the 1st time) was indecisive and almost bereft of any election strategy, so the rest of the PAP was all over the place without any focus. other observers must have noticed this and u will recall several pap MPs came out to make redundant statements on how everyone in the party is behind the commander-in-chief blah blah blah. such statements r a double edged sword as it makes the leadership ineptness even more apparent hahaha. this is also why the pap garment is supremely caught off guard by the HDB problem, Mas Selemat, the floods, the overcrowding, the foreigner issues... you can see that issues that impact ordinary citizens are simply not on the leaders' radar, they r too focused on GDP & courting the high life for themselves and their fellow richies.

I really cant imagine over the years, all the fxxking elites have the conscience to go to food court and see our Ah Ma wiping their table for $800 a month.

Even crocodile, maggots or pigs would shed theirs tears.

And farkers from PAP and those MOMs still dare to come out with good reason to explain why is it good to damn such people.

Tommy Koh, an elite finally broke rank giving just his 2 cents worth of support to the poor, after witnessing inequalities of his whole life. Nevertheless this gesture put him one inch above Wee Shu Min.

How many times the PAP play or wayang wayang with our fellow singaporean citizens...

Just like old Adolf and his gang of thugs/thiefs did the same song and dance routine to play and wayang with the German people "concerns/fears" to get themselves elected and re-elected again...and also to remove all power from the reichstag [Parliament]..

They are just playing the usual tricks to get the neutrals and those starting to "go" to opposition/AP to go "back" to the PAP themselves...

Same old no horse run trick...

And yet the same old fools and "confused" fools will fall for the same old leetarded tricks again...

It is not always "Better to be safer then to be sorry"...how many sorries are you still willing to go thru under the PAP...another 5 - 6 years of pain again...they gonna increase GST and other "funny" yet "not so funny" indirect "taxes and more...still not enough pain...still want more pain...ask yourself where did your money actually end up in the end...these are blood monies...and one still want to undergo even more pain again...what is your final threshold...to do like our other "helpless" fellow citizens who literally gave up...by throwing themselves off flats and onto railway tracks!!!...and also citizens who has resources in the end migrate out of singapore cos of the inane PAP policies.

Lucky,I believe an elite like Tommy Koh can sense that the PAP will get a good beating in the GE if they continue to be clueless in damage control. He is merely showing concern for the PAP. I share the same sentiments as some have mentioned. To me, Tommy and his fellow elites have not done enough to earn the trust of ordinary Singaporeans.

By the way Lucky, your quote and the follow up explanation given by 'recruit ong' @09:59 sums up everything that is wrong in Singapore.

The outcome in this GE may actually seal the fate of many ordinary Singaporeans if there is no collective effort on their part to vote against the PAP.

Even a dummy with IQ of 70 can see how structurally unsound PAP attitudes and policies are.

It's easy to grow a conscience when you no longer need to depend on the system to provide you & your family with the good life. I won't be surprised if Prof Koh has already withdrawn his pension as a lump-sum of a few million dollars --- no longer beholden to PAPies. His children are all grownup, have high-paying jobs and are internationally mobile.

That's why you start to see a few older PAP-types and senior civil servants being more critical and disagreeing with PAPies. It's becoz they already decided not to have monthly pension but instead to withdraw as one big lumpsum. Many of them have taken up PRs in Oz, NZ, Canada etc and their money is overseas. So even if PAPies want to sue, nothing to get in S'pore. Need to sue in those western countries, where the courts will throw out their case as rubbish.

The current supporters of PAP belong to the top 20% income earners who are still greedy for more wealth. They love this environment, as it maximises their wealth & power. Even if it is not sustainable and will collapse eventually, they don't care. The elites already have houses in 5 other different countries and 80% of their wealth is secured safely overseas. People in top 20% can simply move to another country, even dump and cut-loss on whatever properties and savings in Singapore --- no big deal for them.

Like some commentators observe, I won't be surprised if all this "debate" on min wage is one big wayang, and PAP passes a min wage bill right before the elections.

But really, I ask what is the significance of such a bill? Min wage usually affects teenagers working part time, which is not a group that requires urgent help.

Old ah-mas working at MacDonald's in foodcourts will also be affected, but there is nothing stopping the corporations from hiring FTs instead of locals at the min wage level.

After a few years, the min wage will gradually lose its real value due to inflation, and basically become useless.

I am speaking against the min wage not because I feel we should not help the needy. Rather, I see its danger in that many see it as a panacea, when in reality it does nothing in itself. But many Singaporeans will be fooled by the govt's actions, and think that the govt "does care".

Instead of focusing our efforts on getting a min wage instituted, we should be trying to cut the inflow of FTs and to get a more effective scheme of social assistance for the old, needy and ultra-poor. These 2 measures will be far more effective in lowering the income gap and raising the quality of life for those struggling to survive.

Whether the govt will ever do that someday is another story of course.

" The PAP govt has brought in cheap labor from 3rd world countries to keep our GDP growth high. This depressed the wages of the bottom 20% and caused Singapore to have the highest income gap among developed countries. ""

Should we start to explain this to the group of 20% ? Many old uncles, aunties and lowly educated voters may be in the dark.

We need a minimum wage, given that our capitalist system will never grant that. It is a race to the bottom for shrinking wages.

Even at the bottom, in countries like Vietnam and Bangladesh, the workers are clamouring for a minimum wage.

Ironically, it is people who are paid US1 million a year who are balking at paying workers US$100 a month. They don't feel that being paid US$ 1 million a year is too much for them, but paying workers US$100 a month is way too extravagent.

We have the same problem in Singapore, where our millionaire ministers are dead-set against paying our menial workers a decent wage, citing high costs as their excuse.

They will probably implement new enhanced workfare scheme or rehash whatever social policies in place to made min wage not as attractive as their enhanced policies. I guess it would be the usual topping up your CPF account (considering the money is locked up tighter than than Fort Knox that it is unlikely you can touch the money if you don't achieve the min sum for withdrawal)

If you commuting via mrt, you notice the workfare scheme had been revised. If I remember correctly the age limit have been revised to 35 instead of 40.

It doesn't need doctorate to see the current situation when it happening for so many years. I have enough of all this NATO elites that draw millionaires salaries and glorifying their exploits in hosting world events when they cannot even solve domestic issue like overcrowding, poverty, minimum wage and unemployment.

If one can survive and have a decent income, why shd one be bothr about the FTs or minimum wages.The trouble is this is not the case now.What most people want is just to live a simple life and be able to survive. Even this is also diffcult for many locals.

The minimum wage is doomed to fail if they do not concurrently change the FT policy. As is, Singaporeans are already hard pressed to compete with the ultra-cheap FT. What do you think will happen if you implement a minimum wage law while at the same time continue to allow FT to flood into Singapore?

A minimum wage is not a guarantee of a decent income because the job may not be there for some. If the government introduce minimum wage, some job opportunities will disappear. Too many commentators are seduced by socialist arguments. The best way to raise wages is to decrease labour supply. This of course brings its own problem of reducing Singapore's competitiveness.

You have made some great points. Like I said in my previous posting previous PAP policies make it hard to implement minimum wage. As for cost of living going up due to minimum wage, ask yourself whether cost of living has stayed low due to the lack of minimum wage? No. The reason is low wages allowed things like rent, utilities, govt fees, company profits to go up. By the same token, high wages may depress other cost factors. Today it is quite ridiculous, you pay $10,000 a month to the landlord(often a govt linked GLC) for shop space and the worker manning the shop 10 hours a day $1600 a month...cost-wise it is the same if you pay $9K rent and $2.6k in salary.

Ultimately for middle and lower class wage increase to work, one more thing would need to be done.

Because some MNC would then complain wages is too high and threaten to move out.

However PAP (I have read)has actually implemented "incentives" (euphemism for subsidies)for some MNC who wants to set up shop here. (Particularly JTC, which is there to make sure rent is affordable and tolerable)

PAP can actually transfer wealth to middle class without much economical disruption by asking GLC landlord(particularly JTC) to reduce their rent-- if MNC need to offset wage hike.

Then slowly we undo LKY damage to Singapore society from there -- all without deflating residential property which hurts middle class.

"Because some MNC would then complain wages is too high and threaten to move out. - von Hayek"

Von Hayek, MNCs have threatened to walk out of countries like Bangladesh, where workers are striking to be paid an expensive wage of US$90 per month. And these MNCs are staffed with executives who are paid easily US$10,000 per month.

See the massive income inequality? And see that it is the high income earners who are deliberately perpetuating the huge income inequality.

If we do not fight for each other, we would one day see our own wages stagnating or even shrinking, while senior management raise their own wages by leaps and bounds.

Btw, my boss says economy is no good and wants to cut our pay. In the meanwhile, he has just upgraded his car and condo.

The cost of living is now unbearable. Something should be done to lower the cost of living. If th cost of living is lower, then the need for minimum wages would not be so pressing.What people want is just to lead a simple life with decent income.They are even suffered more becasue of the so-called "higher" gdp.

I'm writing to you in regard to what you have been quoted on ST during your recent book launch:

'The growing disparity and the hardship faced by the lowest 20 per cent of our workers are threats to our social cohesion and inconsistent with our policy of inclusive growth,' he said at a book launch. 'As a Straits Times correspondent recently commented, Singapore is a First World country with a Third World wage structure.'

Indeed, I agree with you totally on this point. In my view, the number 1 culprit in causing the fall of income of our lowest 20% of our workforce is due to the relentless influx of foreign "talents" into Singapore, thanks to our Government's open door policy to foreign workers. As it is, the foreign population in Singapore now stands at 36%, the highest among the 1st world nations in the world. Huge influx of foreign workers helps to depress wages in Singapore due to the increase supply of cheap manpower from 3rd world countries.

Increasingly, this huge influx of foreign workers is now also threatening the jobs of our PMETs. Just to give you an illustration, the other day my company was trying to recruit an account assistant. Typically, the market rate for such a position is about $1500 for a fresh recruit. We had many PRC, Vietnamese, Burmese etc applicants (LCCI fresh grads from here) all asking for salaries very much well below $1500. Some Burmese applicants even asked for $800 so that they could get a job and continue to stay in Singapore.

Now, you might ask, how can a Burmese survive on $800 in Singapore? I asked the same question and one told me that he lived with 3 others in a roompaying $150 for rental each. For food, he said he could survive very well on $200 a month. I estimated that he could probably save $400 a month for him to send back home. Using google, one can calculate that $400 is about US$300 or 300,000 Kyat. From google, I've also found out that a junior civil servant is only paid 20,000 Kyat a month in Myanmar. In other words, at $400, this is already more than 1 year's pay of a junior civil servant in Myanmar!

Hence, these 3rd world foreign workers are participating nothing more than economic arbitraging. We of course, can't blame them since it's only natural that people will want to seek out the best for themselves and for their lives. But the question we want to ask ourselves is this - willSingaporeans also want to live like them in our own country? That is, squeezing 4 to a room and eating sparingly for every meals?

Walau, just because Tommy came in to support Minimum Wage, many think that they had the support of a super heavy weight. They forgot that some people liked the Late Ong Teng Cheong, Devan Nair and Tan Kin Lian and now Tommy were wth the Establishments for donkey years.

What made them sang a different tune with their former buddies in PAP and why so late?? After much damages were done. Are they trying to do damage controls, me don't know, BUT, there is always the possibilities. There is no reason to doubt the possibility of fall-out as well.

To me, people who have joined in formulating policies in the past and now change bearing or turn directions have to explain their motives or at least explain what leads to them changing tact.

Pardon me for being cynical as all the Four I mentioned here were/are with the Establishment not only for long durations, they were actively participating in formulating policies themselves despite some of them not been parliamentarians. Tan Kin Lian was with NTUC and Tommy was/is very much involved in foreign relations, local culture and academic discourses such as in this instance, Minimum Wage Discussion.

Are anyone of them implying that policies they helped to formulate and or supported are now found to be counter positive and productive??

Currently, with so many cheap FTs in Singapore, only way to win is to beat them in their games. Say you have a Singaporean couple, husband and wife trying to compete with FTs in Singapore. Here's what the SG couple can do:

Firstly, don't buy HDB. That will save a lot on mortgage. And no kids. That will save them money too. Both husband and wife should rent a room together with 2 other fellas. This will cost about $150-200 rental each.‎ Of course lah, with 2 other people in the room, if they want sex, may have to do it in the bathroom while taking bath together lah.

Next makan: everyday can eat roti and egg (ok lah, can have some kaya too, a bottle of kaya doesn't cost that much). Can have this for breakfast, lunch, dinner. Walk to work (hence, the place they stay must be close to the working place).

I reckoned both husband and wife can survive on $300-400 a month each, which means, they can each ask for, say $380 per month. This is a lot cheaper than FTs' salaries. I'm sure employer will be very happy to recruit them rather than the FTs since they are cheaper than FTs and are Singaporeans too (language advantage).

Only by undercutting FTs, we will be able to beat FTs at their own games. What do you bros think?

@DanielXX: "In the same survey, Singapore is ranked 30 or 40-something in business innovation/entrepreneurship. If you combine these two together, it just means the source of Singapore's competitiveness is not first-world brainpower, but third-world low wages and the willingness of its people to take such shit."

This is PAP's idea of Economic Growth & "competitiveness" for S'pore:

By importing waves after waves of human FTs intoSingapore -http://i36.tinypic.com/s5hana.jpg

I request that professor Tommy Koh,being in the good book of establishment and rather eager to appear as one fair,impartial citizen who looks largely at our Singapore national interest-his claim over these long years for being ardent PAP supporter, should support WP request that one of the KPI,apart fr the present GDP growth figure is the fair distribution of national wealth,proposed by WP MP in parliament before.

Minimium wage will only benefit foreign workers since so many reports have shown that many companies prefer to employ ft than Singies.This will aggravate the rich-poor divide.For minimum wage to work,there should be repatriation of foreigners who are working in jobs that citizens are willing to do.What is the point of having minimium wage if the job goes to a foreign worker.?

Minimium wage will only benefit foreign workers since so many reports have shown that many companies prefer to employ ft than Singies.This will aggravate the rich-poor divide.For minimum wage to work,there should be repatriation of foreigners who are working in jobs that citizens are willing to do.What is the point of having minimium wage if the job goes to a foreign worker.?